The Vietnam Federation of Civil Engineering Associations has recently proposed property tax and development charge to be imposed on private houses in order to accumulate capital for infrastructure improvement.
Property tax would be imposed on homes in urban centers and those near crowded routes with green trees and public lighting systems.
Pham Sy Liem, vice chairman of the federation, said that the tax would take into account the value of both land and housing, replacing the old one which considers only land use rights value. According to him, the Ministry of Finance once proposed a law on land and housing taxes, but did not get approval from the Government. However, this kind of tax has been collected by many countries in the world and should be introduced soon in Vietnam.-
Development charge would only apply to newly built or rebuilt houses. For example, a newly built house would be VND 5 million per square meter more expensive if a new road were built next to it, so the owner would have to pay a charge. The Hanoi People’s Committee had collected the same charge of 10 percent of the value of a newly built house, but it was stopped after two years of implementation.
Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said many ASEAN countries imposed taxes amounting to 1-1.5 percent of the market price of land and housing. The current land tax in Vietnam was only 0.03 percent.
The federation will submit the plan to authorized agencies for approval early this year.